LOCAL  OPTION  IN  TAXATION 


LOCAL  OPTION  IN 
TAXATION 


By 

Lawson  Purdy 

Secretary  New  York  Tax  Reform 
Association 

With  a draft  of  an  Act  to  Amend  the  Tax 
Law  by  Providing  for  the  Appor- 
tionment of  State  Taxes  and 
for  Local  Option  in 
Taxation 


New  York  Tax  Reform  Association 
No.  Ill  Broadway 
New  York 


p'3'TKl 


THE  TROW  PRINT 
Nitv  York 


N Act  to  Amend  the  Tax  Law  by  Pro- 


n.  viding  for  the  Apportionment  of  State 
Taxes  and  for  Local  Option  in  Taxation  will 
be  found  on  page  43. 

Page 

Local  Option  in  Taxation 7 

Local  Option  is  Exercised  Without  the 


Sanction  of  Law 


7 


An  Illustration  from  Experience  in  the 


State  of  New  York 


9 


Local  Officials  Should  Not  Assess  Prop- 
erty for  State  Purposes 1 1 

State  Boards  of  Equalization  Condemned  12 
State  Revenues  Should  Not  be  Raised 
Exclusively  by  Specific  Taxes  . . .13 

Difficulty  of  Raising  State  Revenue  by 
Specific  Taxes  in  New  York  . . .15 

A New  Plan  Having  All  the  Merits  and 
None  of  the  Vices  of  Other  Methods 
of  Raising  State  Revenue  . . . .16 

A Statistical  Investigation  to  Forecast  the 
Effect  of  the  New  Plan  on  Cities  and 

Rural  Districts 17 

Thinly  Settled  Districts  Will  Pay  Less 

State  Tax 19 

An  Incidental  Advantage — Accurate  Sta- 
tistics Made  Necessary 20 


[ 5 ] 


Page 

Local  Option  Does  Not  Require  New 

Methods  of  Taxation 21 

Exemptions  Are  Already  Popular  . .21 

Under  Local  Option  Taxation  of  Mort- 
gages Will  Vanish  23 

Why  Local  Option  Is  Right  ....  23 

Preamble  and  Resolutions  of  the  League 
OF  American  Municipalities  ....  24 

Resolutions  of  the  State  Commerce  Con- 
vention ....  27 


Progress  Toward  Local  Option  in  Taxa- 
tion   .....  29 

New  York  Chamber  of  Commerce  Fol- 
lows the  League 30 

Oregon  Adopts  Apportionment  Recom- 
mended by  the  League 32 

Texas  Seeks  Local  Option 35 

Colorado  Legislature  Adopts  Local  Op- 
tion   35 

Ohio  Business  Men  Demand  Local  Op- 
tion   38 

British  Municipalities  Petition  Parliament 

for  Local  Option 40 

Conclusion 41 


An  Act  to  Amend  the  Tax  Law  by  Pro- 
viding FOR  THE  Apportionment  of  State 
Taxes  and  for  Local  Option  in  Taxa- 


tion   43 

Indorsements 47 


[6] 


LOCAL  OPTION  IN  TAXATION » 


AS  actually  administered,  the  general 
property  tax  no  longer  has  a friend. 
The  theory  of  it  is  also  condemned 
by  every  student  of  taxation.  The  prob- 
lem is  how  we  can  most  effectively  assail 
the  superstitious  reverence  with  which  it 
is  still  regarded  in  rural  districts. 

Local  Option  is  Exercised  without  the  Sanc- 
tion of  Law 

Our  experience  of  the  enforcement  of 
the  general  property  tax  and  of  every  in- 
quisitorial and  coercive  law  points  out 
clearly  the  attack  on  the  line  of  least  re- 
sistance. No  law  can  be  effectively  en- 
forced which  is  inquisitorial  or  subversive 
of  personal  liberty  and  fails  to  have  the 
support  of  the  moral  sense  of  the  com- 
munity. By  a local  option,  unsanctioncd 
by  law,  the  evils  of  such  laws  are  tempered 

1 A paper  read  at  the  National  Tax  Conference,  Buffalo, 
N.  Y.,  May  23-25,  1901, 


in  accordance  with  the  sentiment  of  the 
community.  Local  option  should  be  ex- 
ercised within  the  law,  not  in  spite  of  it. 
It  should  be  the  rule,  not  the  exception. 

We  may  think  that  we  could  devise  a 
tax  system  which  would  suit  every  com- 
munity, but  the  community  will  not  let  us 
do  it,  and  if  we  could  impose  it  upon  them 
by  force  they  would  apply  it  in  such  di- 
verse fashion  that  we  would  not  recognize 
our  own  work.  We  cannot  avoid  local 
option  of  some  sort,  either  with  or  with- 
out the  sanction  of  law,  no  matter  what 
we  do.  Local  option  in  the  liquor  traffic 
has  the  sanction  of  law  in  this  and  many 
States,  and  where  districts  do  not  have  law- 
ful local  option  they  take  it  unlawfully. 
A few  months  ago  I visited  Charleston, 
S.  C.,  and  was  much  interested  in  the 
working  of  the  State  dispensary  law.  This 
law  was  enacted  by  the  votes  of  rural 
members,  and  is  not  approved  by  the 
city  of  Charleston.  The  result  is  that  liq- 
uor is  sold  openly  all  over  Charleston,  and 
the  State  authorities  are  powerless  to  pre- 
vent it.  I was  told  by  a man  in  charge  of 
a State  dispensary  that  no  matter  what  the 

[ 8 ] 


evidence,  no  Charleston  jury  w^ould  con- 
vict in  a case  of  unlawful  liquor-selling. 
State  agents  frequently  raid  illegal  places 
and  seize  what  liquor  is  on  the  premises, 
but  no  longer  make  any  arrests.  The  bar 
of  the  Charleston  Hotel  was  raided  twice 
while  I was  at  the  hotel,  but  the  business 
was  disturbed  for  only  a few  minutes,  and 
only  a small  quantity  of  liquor  was  seized. 
This  is  local  option  without  the  sanction  of 
law.  The  same  sort  of  thing  is  going  on 
in  Kansas,  and  in  every  State  where  we  at- 
tempt to  impose  morality  by  force. 

An  Illustration  from  Experience  in  the  State 
of  New  York 

An  examination  of  the  statistics  of  as- 
sessment will  disclose  a similar  condition 
in  every  State  of  the  Union  which  has  the 
general  property  tax.  A somewhat  ex- 
aggerated instance  occurred  in  the  State  of 
New  York  a few  years  ago.  A law  was 
passed  in  1896  conferring  larger  powers 
on  the  State  Board  of  Tax  Commissioners, 
and  new  commissioners  were  appointed. 

They  made  great  efforts  to  secure  the 
better  assessment  of  personal  property,  and 
[ 9 ] 


procured  the  indictment  of  some  assessors 
and  scared  the  rest.  In  the  town  of  Vol- 
ney  there  were  three  assessors,  and  they 
apportioned  the  work  so  that  one  assessor 
assessed  the  property  in  the  large  village  of 
Fulton  within  the  town,  and  the  other  two 
assessed  the  property  in  the  town  outside 
the  village  limits.  The  town  assessors  in- 
creased the  assessment  outside  the  village 
from  about  $25,000  to  over  $400,000,  and 
most  of  the  increase  was  on  the  cattle, 
horses,  sheep,  hogs,  and  implements  of  the 
farmers.  The  village  assessor  absolutely 
refused  to  follow  the  example  of  the  other 
town  assessors,  and  did  not  add  to  his  usual 
assessment  of  personal  property.  The  town 
assessors  said  they  rated  everything — pianos, 
guns,  and  even  fish-poles,  and  in  one  case 
they  assessed  a cow  $20,  the  property  of  a 
widow  who  owned  a few  acres  of  land. 
They  assessed  a young  man’s  gun  $10.  In 
telling  the  story,  the  village  assessor  said : 
“ When  they  got  through  with  that  raid  on 
personal  property  they  made  a great  row 
because  we  found  no  pianos  or  guns  in 
the  village,  which  has  6,000  inhabitants.” 

When  the  Board  of  Supervisors  of  the 
[ 10  ] 


county  met  it  was  found  that  no  other 
town  in  the  county  had  followed  this  ex- 
ample, and  as  this  town  had  not  voted 
with  the  majority  of  the  board  they  re- 
ceived no  favors.  As  a matter  of  fact,  the 
board  had  no  authority  to  do  anything  for 
them,  for  our  law  does  not  provide  for  any 
equalization  of  personal  assessments.  The 
village  assessor  said  that  the  town  assessors 
would  never  again  be  induced  to  assess  the 
live-stock,  pianos,  and  fish-poles  of  the 
farmers  until  every  other  town  in  the 
State  had  done  it  for  one  year. 

The  assessment  for  1898  fully  testifies  to 
the  truth  of  this  assertion,  as  the  assessment 
of  personal  property  to  the  farmers  was 
only  about  $25,000,  instead  of  over  $300,- 
000,  as  the  year  before,  and  the  number  of 
persons  assessed  was  loi,  instead  of  352. 
This  is  local  option  in  taxation  without  the 
sanction  of  law. 

Local  Officials  Should  Not  Assess  Property 
for  State  Purposes 

To  make  any  real  improvement  in  the 
systems  of  taxation  of  three-fourths  of  the 
States,  the  constitutions  must  be  amended 
[ II  1 


by  striking  out  the  provisions  for  uniform- 
ity and  equal  taxation  of  all  property. 

The  next  step  must  be  to  devise  a sys- 
tem of  State  revenue  which  will  dispense 
with  the  taxation  of  property  for  State 
purposes,  as  assessed  by  local  officials.  So 
long  as  State  revenue  is  obtained  by  taxing 
all  property  assessed  locally,  local  option 
is  almost  impracticable ; but  this  is  by  no 
means  the  only  reason  for  the  change. 

State  Boards  of  Equalization  Condemned 

The  general  property  tax  for  State  pur- 
poses is  a source  of  great  evil  wherever  it 
is  employed,  and  it  has  been  condemned 
by  tax  commissioners  in  many  States.  In 
their  last  report  the  Tax  Commissioners  of 
Michigan  say : “No  feature  of  our  tax 
system  should  receive  more  careful  atten- 
tion by  the  legislature-elect  than  that  of 
State  and  county  equalization.  There  are 
few  States  having  similar  methods  for  the 
equalization  of  property,  but  that  ascribe 
their  gravest  ills  to  the  baneful  effects  re- 
sulting from  such  apportionments.  The 
evils  of  undervaluation  of  property  in 
Michigan  may  be  traced  almost  invariably 
[ 12  ] 


to  apportionments  for  State  and  county 
taxes. 

“The  occasion  for  State  equalization  is 
generally  one  of  days  filled  with  woe  and 
gloom.  Messengers  who  are  sent  from  the 
counties  are  those  who  can  best  picture  the 
swamps,  barren  and  unfruitful  fields,  and 
who  can  leave  the  deepest  impression  of 
great  desolation.” 

State  Revenues  Should  Not  Be  Raised  Ex- 
clusively by  Specific  Taxes 

The  Michigan  Tax  Commission  shares 
the  prevailing  opinion  that  the  only  way 
to  avoid  State  equalization  is  to  raise  suf- 
ficient revenue  for  State  purposes  by  spe- 
cific taxes,  as  is  done  in  New  Jersey, 
Pennsylvania,  Connecticut,  and  some  other 
States.  There  are  many  and  grave  objec- 
tions to  following  the  examples  of  these 
States.  These  States  rely  for  revenue  upon 
specific  taxes  levied  upon  certain  selected 
forms  of  property.  These  taxes  being  im- 
posed at  an  unvarying  rate  sometimes  pro- 
duce too  much  revenue,  which  the  legis- 
latures promptly  squander  ; or  produce  too 
little,  and  proper  expenditures  have  to  be 
[ 13] 


curtailed ; or  the  State  is  forced  to  borrow. 
All  three  of  these  difficulties  have  been 
met  in  recent  years  by  the  States  enu- 
merated. In  times  of  excessive  revenue 
the  legislatures  acquire  habits  of  extrava- 
gance ; and  in  times  of  deficit  the  business 
community,  especially  in  the  cities,  lives  in 
daily  dread  that  some  new  and  oppressive 
tax  will  be  laid  to  fill  the  coffers  of  the 
State.  The  system  is  utterly  without  flex- 
ibility and  does  more  damage  than  the 
mischief  that  it  was  designed  to  remedy. 

Speaking  of  Governor  Odell’s  plan  to 
do  away  with  direct  taxation  in  New  York, 
the  Hartford  C our  ant  says:  “We  respect- 
fully invite  the  leaders  of  this  reform  scheme 
to  call  in  Connecticut  and  make  inquiry  as 
to  how  the  removal  of  the  State  tax  has 
worked  here.  Every  thoughtful  man 
wishes  the  State  tax  had  not  been  removed. 
Its  presence,  with  the  accountability  that  it 
enforces,  is  a mighty  safeguard  against  ex- 
travagance. If  New  York  drops  that  tax 
she  will  be  sorry  some  day  and  probably 
find  herself  unable  to  put  it  on  again.” 


[ Ml 


Difficulty  of  Raising  State  Revenue  by  Spe* 
cific  Taxes  in  New  York 

Whatever  may  be  thought  of  this  rem- 
edy for  equalization,  from  an  academic 
standpoint,  it  is  often  exceedingly  difficult 
to  carry  it  into  effect,  as  is  shown  by  the 
experience  of  New  York.  For  twenty 
years  the  Legislature  has  been  endeavoring 
to  provide  revenue  for  the  State  by  specific 
taxes.  It  has  succeeded  in  raising  about 
$14,000,000  annually,  and  yet,  at  the  end 
of  twenty  years,  we  still  have  to  raise  a 
sum  by  the  general  property  tax  nearly  as 
great  as  the  total  expenses  of  the  State  when 
the  movement  began  in  1881. 

Two  obstacles  will  always  be  encountered 
— either  large  and  important  interests  must 
be  burdened  with  additional  taxes,  which 
they  will  vigorously  resist ; or  the  local 
governments  of  the  State  must  relinquish 
subjects  of  taxation  from  which  they  now 
derive  a considerable  revenue ; and  it  is 
always  difficult  to  convince  them  that  they 
will  gain  as  much  by  the  remission  of  State 
taxes  as  they  lose  by  abandoning  these 
sources  of  revenue. 


[ IS  ] 


A New  Plan  Having  all  the  Merits  and  None 
of  the  Vices  of  other  Methods  of  Raising 
State  Revenue 

The  plan  of  apportioning  State  taxes,  in- 
dorsed by  the  New  York  Chamber  of  Com- 
merce and  by  the  last  convention  of  the 
League  of  American  Municipalities,  has 
also  been  indorsed  by  the  State  Commerce 
Convention  of  New  York  and  by  more 
than  fifty  labor  organizations.  It  has  all  of 
the  merit  and  none  of  the  vices  of  the  plan 
of  raising  revenue  by  specific  taxes.  It  is 
simple,  flexible,  and  has  a tendency  to  fix 
responsibility  and  check  extravagance.  It 
is  really  the  application  to  political  divisions 
of  the  principle  of  income  taxation  without 
the  inquisitorial  features  which  render  the 
tax  upon  private  incomes  obnoxious  to 
so  many.  This  method  is  simply  to  ap- 
portion the  State  tax  to  the  several  counties 
of  the  State  in  proportion  to  local  revenue. 
For  example,  if  the  State  requires  $1,000,- 
000  and  the  total  local  revenue  is  $10,000,- 
000,  each  county  will  be  required  to  pay 
to  the  State  ten  per  cent,  as  much  as  its  own 
local  revenue;  if  a county  and  the  towns 
[ 16  ] 


and  cities  within  it  are  extravagant,  it  will 
pay  more  State  tax  than  if  it  is  economical. 
The  amount  of  the  State  tax  will  be  defi- 
nitely known,  and  any  State  extravagance 
will  be  immediately  felt  and  the  legislators 
called  to  account.  The  board  which  ap- 
portions the  State  tax  will  have  merely  min- 
isterial functions,  and  the  apportionment 
will  be  based  upon  a sum  in  proportion. 
There  is  no  more  opportunity  for  friction 
between  counties,  and,  to  a certain  extent, 
any  locality  can  determine  whether  its  share 
of  State  taxes  shall  be  large  or  small.  The 
same  system  of  apportionment  should  be  fol- 
lowed for  raising  county  revenue. 

A Statistical  Investigation  to  Forecast  the  Ef- 
fect of  the  New  Plan  on  Cities  and  Rural  Dis- 
tricts 

There  are  no  statistics  available  to  show 
the  precise  effect  of  this  change  in  the 
apportionment  of  State  taxes  upon  all  the 
counties  of  this  State  or  of  any  State  in  the 
Union,  but  in  1899  ^ legislative  committee 
was  appointed  in  New  York  to  investigate 
the  subject  of  taxation,  and  compiled  some 
useful  statistics.  The  committee  made  a 
[ 17  ] 


very  careful  investigation  of  the  amount  of 
money  raised  for  all  public  purposes  by  the 
three  counties  of  Oswego,  Chenango,  and 
Cattaraugus,  and  by  all  the  taxing  districts 
within  these  counties.  The  amount  raised 
for  all  public  purposes  in  the  city  of  New 
York,  which  comprises  four  counties,  is 
also  known,  and  as  the  city  of  New  York 
represents  over  two-thirds  of  the  taxable 
property  of  the  State,  and  pays  over  two- 
thirds  of  the  taxes,  we  are  able  to  de- 
termine the  effect  of  the  change  upon  the 
city  of  New  York  and  the  three  counties 
investigated  by  the  committee,  with  sub- 
stantial accuracy.  For  the  year  in  which 
these  statistics  were  compiled  the  city  of 
New  York  paid  $8.20  to  the  State  for  every 
$ 1 00  it  raised ; Oswego  County  paid  $ 1 0.42; 
Chenango,  $ 1 2.82 ; and  Cattaraugus,  $10.- 
13.  If  the  apportionment  had  been  made 
on  the  basis  of  revenue,  it  appears,  there- 
fore, that  the  city  of  New  York  would 
have  paid  slightly  more  and  the  other  three 
counties  considerably  less. 

These  three  counties  are  all  distinctly 
rural  counties,  there  being  only  one  city  in 
the  three,  and  the  combined  population  is 
[ 18] 


only  170,000.  Chenango  has  the  smallest 
population,  and  Chenango  would  save  most 
in  State  taxes  by  an  apportionment  on  the 
basis  of  revenue.  If  the  same  system  were 
applied  to  the  raising  of  county  revenue,  the 
saving  which  would  be  effected  by  the 
smallest  rural  places  becomes  still  more  ap- 
parent. There  are  some  towns  in  the 
county  of  Chenango  which  paid  more  than 
one-fifth  of  their  total  revenue  to  the  State, 
whereas  the  large  village  of  Norwich  paid 
only  a little  more  than  the  city  of  New 
Y ork,  the  amount  being  $ 8 . 3 5 in  every  $100. 

Thinly  Settled  Districts  Will  Pay  Less  State 
Tax 

A little  reflection  will  convince  anyone 
that  this  plan  of  apportionment  must  always 
work  to  the  advantage  of  thinly  settled  rural 
districts,  just  as  it  would  in  the  State  of  New 
York.  From  the  standpoint  of  expediency 
and  justice  this  is  as  it  should  be,  and  from 
a political  standpoint  it  renders  the  adoption 
of  this  system  comparatively  easy.  The  cities 
would  be  very  great  gainers  by  being  allowed 
to  exempt  certain  classes  of  property  from 
taxation,  and  could  well  afford  to  pay  a little 
[ 19  ] 


more  to  the  State  for  the  privilege.  The 
rural  districts  are  not  generally  so  anxious 
for  changes  in  the  system  of  local  taxation, 
but  would  be  compensated  for  the  privilege 
granted  the  cities  by  a very  considerable 
saving  of  State  and  county  taxes. 

An  Incidental  Advantage — Accurate  Statistics 
Made  Necessary 

An  incidental  advantage  of  this  system 
will  be  the  necessity  for  an  annual  publi- 
cation of  accurate  statistics,  showing  the 
amount  of  revenue  raised  in  each  political 
division  of  the  State,  and  the  sources  of  such 
revenue.  At  the  present  time  we  have  no 
such  system,  and  we  are  trying  to  carry  on 
the  business  of  the  State  in  ignorance  of  our 
income  and  the  manner  in  which  we  ob- 
tain it.  No  private  business  could  be  run 
in  this  fashion  for  a year.  Whether  we 
adopt  apportionment  in  proportion  to  reve- 
nue or  not,  we  ought  to  have  such  knowl- 
edge of  our  govermental  affairs  as  these 
statistics  will  give  us. 


[ 20  ] 


Local  Option  Does  Not  Require  New  Methods 
of  Taxation 

With  the  adoption  of  this  plan  the  way 
is  clear  for  any  county  or  city  to  adopt  its 
own  system  of  raising  revenue,  without  dis- 
turbing the  system  of  the  State.  This  local 
option  should  not  be  an  option  to  devise 
new  methods  of  taxing  ; it  should  be  exer- 
cised within  the  general  statutes  of  the  State 
and  should  be  confined  to  the  right  to  ex- 
empt any  class  or  classes  of  property  from 
taxation.  If  the  power  were  granted  to  in- 
dependent divisions  of  the  State  to  inaugu- 
rate new  systems,  it  would  lead  to  serious 
confusion.  The  courts  would  have  many 
laws  to  interpret,  and  uncertainty  and  costly 
litigation  would  result.  As  nearly  every- 
thing is  now  subject  to  taxation,  the  power 
to  exempt  is  all  that  we  require. 

Exemptions  Are  Already  Popular 

The  power  to  exempt  will  certainly  be 
exercised,  for  the  sentiment  is  strong  in 
many  cities  for  the  exemption  of  mortgages 
and  other  securities,  and  the  labor  unions 
and  business  men  are  practically  a unit  in 
[ 21  1 


favor  of  exempting  merchandise  and  capital 
engaged  in  manufacturing.  In  the  States 
of  New  Hampshire  and  Vermont  and  in 
Delaware  and  several  Southern  States,  towns 
are  permitted  to  exempt  new  industries  for 
a term  of  years.  This  local  option  is  gen- 
erally popular  and  much  exercised.  In  the 
States  of  New  York  and  Michigan,  where 
this  practice  is  not  allowed  by  law,  it  has, 
nevertheless,  been  common  for  towns  by 
vote  to  exempt  new  manufacturing  plants. 
They  have  done  this  in  spite  of  the  fact 
that  to  exempt  a new  industry  is  the  worst 
kind  of  discrimination,  for  it  gives  special 
advantages  to  favored  persons.  The  ex- 
emption of  a class  of  property  is  not  a 
special  favor,  as  competition  between  per- 
sons owning  property  of  the  class  exempted 
reduces  prices,  and  the  benefits  are  distrib- 
uted. At  the  same  time  these  experiments 
show  that  the  people,  in  a blundering  way, 
have  been  trying  to  go  in  the  right  direc- 
tion, and  that,  with  the  legal  right  to  ex- 
empt classes  of  property,  exemptions  would 
be  generally  and  promptly  made. 


[ 22  ] 


Under  Local  Option,  Taxation  of  Mortgages 
Will  Vanish 

Mortgages  remain  taxable  in  many  States, 
because  the  members  of  the  Legislature  are 
afraid  of  the  supposed  sentiment  of  their 
constituents,  although  they  are  generally 
fully  aware  of  the  injustice  of  such  taxa- 
tion. With  the  power  to  exempt  mort- 
gages, mortgage  taxation  in  the  cities  would 
be  abolished  at  once,  and  would  speedily  be 
a thing  of  the  past  in  every  State  that  had 
local  option. 

Why  Local  Option  Is  Right 

Local  option  is  expedient  because  it  is 
the  quickest  and  surest  way  toward  progress, 
but  it  is  not  only  expedient,  it  is  right;  it 
is  that  system  of  government  under  which 
questions  are  decided  by  those  who  have 
the  fullest  information,  who  have  the  best 
opportunity  to  know,  and  who  have  the 
greatest  interest  in  a wise  and  just  decision. 


PREAMBLE  AND  RESOLUTIONS 
OF  THE 

LEAGUE  OF  AMERICAN  MUNICI- 
PALITIES 

FAVORING  LOCAL  OPTION  IN  TAX- 
ATION 1 

HEREAS,  About  one-twelfth  of 


the  whole  population  of  this  coun- 
try is  domiciled  in  cities  of  more 


than  8,000  inhabitants  ; and 

Whereas,  There  is  scarcely  a State  in  this 
Union  which  does  not  have  within  its  bor- 
ders one  or  more  cities  the  government  of 
which  requires  the  solution  of  more  difficult 
and  important  questions  than  the  govern- 
ment of  the  States  in  which  they  are  sit- 
uated ; and 

Whereas,  The  fundamental  principle  of 

^Adopted  at  the  Fourth  Convention,  Charleston  S.  C.,  De- 
cember 12-15,  1900. 


[ 24  ] 


our  free  institutions  is  local  self-govern- 
ment ; and 

Whereas,  Improvement  in  municipal  tax- 
ation is  practically  impossible  so  long  as  tax- 
ation must  be  equal  and  uniform  through- 
out each  State  ; and 

Whereas,  The  constitutions  of  most  of  the 
States  demand  the  uniform  taxation  of  all 
property,  and  State  revenue  in  excess  of  that 
derived  from  specific  taxes  is  now  raised 
by  an  effort  at  uniform  tax  on  all  property, 
which  in  practice  is  grossly  unequal  and 
unjust.  Now,  therefore,  be  it 

Resolved,  That  all  provisions  in  State  con- 
stitutions should  be  abolished  which  restrict 
the  power  of  the  Legislature  to  regulate 
assessment  and  taxation. 

Resolved,  That  so  much  State  revenue,  as 
may  be  required  in  excess  of  that  derived 
from  specific  taxes  should  be  apportioned 
to  and  paid  by  the  counties  or  towns  in  pro- 
portion to  county  or  town  revenue. 

Resolved,  That  every  county  or  town  and 
every  city  be  granted  the  right  to  regulate 
the  assessment  and  taxation  of  property 
at  its  discretion,  provided  any  increase  or 
reduction  of  assessment  must  be  uniform 
[ 25  ] 


throughout  such  county,  town,  or  city,  and 
not  made  on  the  ground  of  ownership. 

Resolved,  That  the  executive  officers  of 
this  league  be  instructed  to  co-operate  with 
other  like-minded  associations  or  persons  to 
secure  the  enactment  of  measures  in  har- 
mony with  these  resolutions. 


[ 26  1 


RESOLUTIONS  OF  THE  STATE 
COMMERCE  CONVENTION^ 


Resolved,  That  the  State  Commerce  Con- 
vention reiterates  its  resolution  that  the  best 
way  to  reform  the  system  of  local  taxation 
is  to  grant  local  option  in  taxation  to  the 
cities  and  counties  of  the  State,  and  to  carry 
this  resolution  into  effect  recommends  the 
passage  of  the  bill  for  the  apportionment  of 
State  taxes  and  for  local  option  in  taxation, 
prepared  by  the  New  York  Tax  Reform 
Association  and  unanimously  indorsed  by 
many  organizations,  some  of  which  are  mem- 
bers of  this  convention. 

Resolved,  That  this  convention  indorse 
the  following  resolution  on  taxation,  unan- 
imously adopted  by  the  National  Tax  Con- 
ference : 

“ This  conference  recommends  to  the 
States  the  recognition  and  enforcement  of 
the  principles  of  inter-State  comity  in  tax- 

1 Adopted  at  the  Third  Convention,  Buffalo,  N.  Y.,  October 
16-17,  1901. 


[ 27  ] 


ation.  These  principles  require  that  the 
same  property  should  not  be  taxed  at  the 
same  time  by  two  State  jurisdictions,  and 
that  if  the  title  deeds  or  other  paper  evi- 
dences of  the  ownership  of  property  or  of 
an  interest  in  property  are  taxed,  they  shall 
be  taxed  at  the  situs  of  the  property  and  not 
elsewhere.  These  principles  should  also 
be  applied  to  any  tax  upon  the  transfer  of 
property  in  expectation  of  death  or  by  will 
or  under  the  laws  regulating  the  distribu- 
tion of  property  in  case  of  intestacy.” 


[ 28  ] 


PROGRESS  TOWARD  LOCAL  OP- 
TION IN  TAXATION  1 


Mr.  Chairman  and  Gentlemen  : The 
league  of  American  Municipalities,  at  its 
last  convention  in  Charleston,  S.  C,,  unan- 
imously adopted  certain  resolutions,  outlin- 
ing the  changes  which  should  be  made  in 
the  constitutions  and  statutes  of  our  States, 
in  order  that  progress  in  taxation  may  be 
possible. 

It  is  less  than  nine  months  since  that 
convention  was  held,  yet  action  has  already 
been  taken  in  several  States  in  accordance 
with  the  recommendations  of  the  league. 
The  resolutions  adopted  by  the  league, 
which  have  had  such  approval,  are  as  fol- 
lows : 

“ Resolved,  That  all  provisions  in  State 
constitutions  should  be  abolished  which  re- 
strict the  pow.er  of  the  Legislature  to  reg- 
ulate assessment  and  taxation. 

^ Paper  read  at  the  Fifth  Annual  Convention  of  the  League 
of  American  Municipalities,  Jamestown,  N.  Y.,  August  23, 
1900. 


[ 29  ] 


“ Resolved^  That  so  much  State  revenue, 
as  may  be  required  in  excess  of  that  derived 
from  specific  taxes,  should  be  apportioned 
to  and  paid  by  the  counties  or  towns  in 
proportion  to  county  or  town  revenue. 

“ Resolved,  That  every  county  or  town 
and  every  city  be  granted  the  right  to  reg- 
ulate the  assessment  and  taxation  of  property 
at  its  discretion,  provided  any  increase  or 
reduction  of  assessment  must  be  uniform 
throughout  such  county,  town,  or  city,  and 
not  made  on  the  ground  of  ownership.” 

New  York  Chamber  of  Commerce  Follows  the 
League 

Three  weeks  after  the  adoption  of  these 
resolutions  the  Chamber  of  Commerce  of 
the  State  of  New  York,  one  of  the  most 
influential  and  conservative  organizations  in 
the  country,  unanimously  approved  the  re- 
port of  its  committee,  on  State  and  muni- 
cipal taxation,  and  the  bill  presented  by  the 
committee,  “ For  the  Apportionment  of 
State  Taxes  and  for  Local  Option  in  Tax- 
ation.” Following  the  action  of  the  Cham- 
ber, the  bill  was  indorsed  by  the  Merchants’ 
Association,  the  Board  of  Trade  and  Trans- 
[ 30  1 


portation,  the  West  End  Association,  the 
United  Real  Estate  Owners  Associations, 
the  Central  Federated  Union,  the  Building 
Trades  Council,  fifty  labor  organizations  in 
the  city  of  New  York,  and  a number  of 
commercial  and  reform  associations  through- 
out the  State. 

This  bill  follows  precisely  the  plan  out- 
lined by  the  league,  except  that  no  amend- 
ment to  the  Constitution  of  the  State  of 
New  York  is  necessary.  The  bill  provides, 
first,  that  the  city  of  New  York,  through 
its  municipal  assembly,  or  any  county  of  the 
State  by  its  board  of  supervisors,  may  ex- 
empt from  all  taxation  or  reduce  the  assess- 
ment of  any  class  of  property,  provided  such 
exemption  shall  have  uniform  operation 
throughout  the  city  or  county,  and  shall  not 
be  made  on  the  ground  of  ownership.  That 
is  to  say,  that  no  exemption  shall  be  made 
which  would  be  in  the  nature  of  a special 
privilege  to  favored  persons  or  corporations, 
and  that  it  must  apply  to  all  property  of 
the  character  designated  within  any  city  or 
county. 

In  the  next  section  of  the  bill  provision 
is  made  for  the  gathering  of  statistics  by 
[ 31  ] 


the  State  Board  of  Tax  Commissioners,  so 
as  to  show  the  gross  revenue  of  every  tax 
district  in  the  State  by  counties,  and  the 
sources  of  such  revenue. 

In  the  third  section,  an  amendment  is 
made  to  that  section  of  the  tax  law  which 
provides  for  the  equalization  of  assessed 
values,  and  the  apportionment  of  the  State 
tax,  so  that  the  State  Board  of  Equaliza- 
tion has  merely  the  ministerial  duty  of  de- 
termining the  proportion  of  State  tax  which 
each  county  shall  pay,  by  dividing  the 
gross  revenue  of  each  county,  including  all 
the  tax  districts  within  it,  by  the  sum  of 
the  gross  revenue  of  all  the  tax  districts  of 
the  State,  for  the  preceding  calendar  year. 

Oregon  Adopts  Apportionment  Recommended 
by  the  League 

Although  the  bill  recommended  by  the 
Chamber  of  Commerce  did  not  become  a 
law  in  New  York  this  year,  the  plan  of 
apportionment  found  favor  in  Oregon  and 
became  a law  in  that  State  by  the  approv- 
al, on  February  27th,  of  House  Bill  No.  68. 
The  principle  of  the  Oregon  law  is  in 
harmony  with  the  League’s  resolution,  but 
[ 32  ] 


the  law  differs  somewhat  from  that  pro- 
posed for  New  York,  in  that  the  appor- 
tionment is  only  made  every  five  years  in- 
stead of  annually.  The  directions  for  ap- 
portionment are  contained  in  Section  4 of 
the  Oregon  law,  and  are  as  follows  : 

“ In  order  to  ascertain  the  proportion  of 
such  taxes  to  be  paid  by  the  several  coun- 
ties, said  State  officers  shall  ascertain,  from 
the  reports  of  expenditures  of  the  several 
counties  on  file  in  the  office  of  the  Secre- 
tary of  State,  the  average  amount  of  ex- 
penditure in  each  county  during  a period 
of  five  years,  and  each  county  shall  pay 
such  proportion  of  said  State  taxes  as  its 
average  expenditure  for  said  period  bears  to 
the  total  amount  of  expenditures  in  all  of 
the  counties  of  the  State,  such  computa- 
tions to  be  made  by  said  State  officers 
in  January,  1905,  and  in  January  in  each 
fifth  year  thereafter.  Until  the  January, 
1905,  computation,  the  proportion  of  the 
State  taxes  to  be  paid  by  the  several  coun- 
ties shall  be  as  set  out  in  the  following 
table,  which  is  based  on  the  assessments  of 
the  several  counties  for  the  past  five  years, 
to  wit.” 


[33  ] 


The  principle  of  apportionment  on  the 
basis  of  revenue  is  applied  in  this  Oregon 
law,  but  unfortunately  it  is  not  perfectly 
applied.  The  apportionment  is  based  on 
expenditures  made  for  county  purposes  ex- 
clusively, instead  of  on  the  expenditure  for 
county  purposes  and  for  all  other  purposes 
within  the  county.  In  Oregon  this  may 
make  very  little  difference,  but  in  the  State 
of  New  York  and  in  many  other  States  it 
would  operate  to  the  advantage  of  counties 
containing  large  cities,  and  throw  an  undue 
burden  upon  the  rural  counties.  It  would 
oppress  the  rural  counties  because  county 
expenditures  do  not  everywhere  bear  the 
same  relation  to  the  total  of  local  expendi- 
tures within  the  county,  being  frequently 
smaller  in  proportion  to  local  expenditures 
in  counties  which  contain  large  cities  than 
in  the  rural  counties. 

I fear  that  the  Oregon  law  will  be  found 
defective  also  in  the  definition  of  terms. 
In  the  New  York  bill  the  words  “gross 
revenue  ” are  carefully  defined,  and  the  def- 
inition excludes  money  borrowed,  whereas 
the  word  “ expenditure  ” is  used  in  the 
Oregon  statute  without  definition  and  would 
[ 34  ] 


appear  to  include  the  expenditure  for  pub- 
lic works  paid  for  with  borrowed  money. 
This  would  unfairly  increase  the  propor- 
tion of  such  counties  as  had  made  extensive 
and  permanent  improvements. 

Texas  Seeks  Local  Option 
The  Houston  Manufacturers’  Association 
has  for  some  time  been  urging  the  adoption 
of  an  amendment  to  the  Constitution  of 
Texas  to  permit  local  option  in  taxation. 
At  the  last  session  of  the  Texas  Legislature 
a bill  for  this  purpose  was  introduced  and 
passed  the  Lower  House,  but  too  late  in  the 
session  to  be  passed  by  the  Senate. 

Colorado  Legislature  Adopts  Local  Option 
Amendment 

The  most  notable  action  in  harmony 
with  the  resolutions  of  the  League  has  been 
taken  by  the  State  of  Colorado.  The  res- 
olutions were  sent  to  each  member  of  the 
Colorado  Legislature,  and  I am  informed 
that  they  had  an  influence  in  determining 
the  favorable  vote  on  an  amendment  to  the 
Colorado  Constitution.  The  amendment 
is  as  follows : 

Section  9.  Once  in  four  years,  but  not 
[ 35  ] 


oftener,  the  voters  of  any  county  in  the 
State  may,  by  vote,  at  any  general  election, 
exempt,  or  refuse  to  exempt,  from  all  tax- 
ation for  county,  city,  town,  school,  road, 
and  other  local  purposes,  any  or  all  per- 
sonal property  and  improvements  on  land  ; 
but  neither  the  whole  nor  any  part  of  the 
full  cash  value  of  any  rights  of  way,  fran- 
chises in  public  ways,  or  land,  exclusive  of 
the  improvements  thereon,  shall  be  so  ex- 
empted. Provided,  however,  that  such 
question  be  submitted  to  the  voters  by  virt- 
ue of  a petition  therefor,  signed  and  sworn 
to  by  not  less  than  i oo  resident  taxpayers  of 
such  county,  and  filed  with  the  county  clerk 
and  recorder  not  less  than  thirty  nor  more 
than  ninety  days  before  the  day  of  election. 

“ Section  1 1 . The  rate  of  taxation  on 
property  for  State  purposes  shall  never  ex- 
ceed four  mills  on  each  dollar  of  valuation, 
but  the  provisions  of  this  section  shall  not 
apply  to  rights  of  way,  franchises  in  public 
ways,  or  land — the  full  cash  value  of  which 
may  be  taxed  at  such  additional  rate,  not 
exceeding  two  mills  on  each  dollar  of  as- 
sessed valuation,  as  shall  be  provided  by 
law,  after  exempting  all  personal  property 
[ 36  ] 


and  improvements  thereon  from  such  ad- 
ditional rate  of  taxation.” 

In  1899  the  Senate  of  Colorado  appoint- 
ed a committee  to  investigate  the  subject  of 
taxation  and  suggest  amendments.  Senator 
James  W.  Bucklin,  of  Grand  Junction, 
Col.,  was  made  chairman  of  the  com- 
mittee, and,  on  behalf  of  the  committee, 
visited  the  Australasian  colonies  of  Great 
Britain.  On  his  return  he  submitted  an 
exhaustive  report,  setting  forth  the  condi- 
tions as  he  found  them  in  Australia  and 
New  Zealand,  and  recommended  the  adop- 
tion of  the  Australasian  tax  system,  and,  as 
a step  in  that  direction,  he  proposed  the 
amendment  to  the  Constitution  which  I 
have  just  read. 

The  experience  of  New  Zealand  with 
local  option  in  taxation  covers  a period  of 
five  years.  In  September,  1896,  a local  op- 
tion act  was  passed,  but  it  imposed  such 
severe  restrictions  as  to  render  action  by  any 
municipality  extremely  difficult.  Only  di- 
rect taxpayers  were  allowed  to  vote,  and  the 
majority  in  favor  of  any  change  was  re- 
quired to  be  equal  to  a third  of  the  voters. 
In  spite  of  these  restrictions,  fourteen  local 
[ 37  ] 


bodies  had  adopted  changes  in  their  local 
systems  up  to  February,  1 900.  At  the  Par- 
liamentary session  of  1 899  and  1900,  amend- 
ments introduced  by  the  Premier,  Mr.  Sed- 
don,  were  adopted  which  gave  tenants  the 
right  to  vote,  abolish  plural  voting,  and  pro- 
vided further  that  a simple  majority  was 
sufficient  to  make  changes  in  the  system  of 
local  taxation.  Since  the  act  was  amended, 
nearly  fifty  local  bodies  have  voted  to  abol- 
ish taxes  on  improvements. 

The  testimony  of  the  Premier  and  other 
officials  in  New  Zealand,  as  quoted  in  Sen- 
ator Bucklin’s  report,  shows  that  the  Local 
Option  Act  has  been  a great  success  and 
that  there  is  no  thought  of  its  repeal. 

The  amendment  passed  the  Colorado 
Senate  by  a vote  of  26  to  6,  and  the  House 
by  a vote  of  50  to  ii.  If  this  vote  is  at 
all  indicative  of  public  sentiment  in  Colo- 
rado, there  should  be  little  doubt  of  the  rat- 
ification of  the  amendment  when  it  is  sub- 
mitted to  the  people  in  the  autumn  of  1902. 

Ohio  Business  Men  Demand  Local  Option 

The  business  men  of  Ohio  have  become 
aroused  to  the  necessity  for  making  great 
[ 38  ] 


changes  in  the  tax  system  of  that  State,  and 
the  Ohio  State  Board  of  Commerce  has  en- 
tered upon  a campaign  of  education  to  se- 
cure the  passage  by  the  next  Legislature  of 
an  amendment  to  the  Constitution.  The 
State  Board,  in  its  statement  of  principles, 
declares : 

“ For  an  amendment  to  the  Constitution 
to  permit  local  option  in  taxation  and  a 
simplification  of  our  system  of  taxation  by 
means  of  which  gains  of  great  and  perma- 
nent value  to  every  business  interest  can  be 
secured.” 

The  State  Board  has  engaged  Mr.  Allen 
Ripley  Foote,  of  Chicago,  to  conduct  their 
campaign,  and  at  once  provided  for  sending 
Public  Policy  weekly  to  the  managing  edi- 
tors of  534  newspapers  in  the  State. 

This  movement  in  Ohio  is  not  confined 
to  business  men.  On  July  12th  the  Ohio 
State  Bar  Association  adopted  a resolution: 

‘‘That  the  Constitution  of  Ohio  should 
be  so  amended  as  to  completely  separate 
State  and  local  taxation ; that  each  city  and 
county  of  the  State  be  vested  with  the  power 
of  taxation  for  the  purposes  of  such  city  or 
county,  subject  to  the  authority  of  the  Leg- 
[ 39  ] 


islature  to  limit  local  indebtedness  and  fix 
a maximum  rate  of  taxation  which  the  city 
or  county  may  levy.” 

The  State  platforms  of  both  great  political 
parties  devoted  unusual  space  to  taxation,  and 
while  somewhat  vague,  as  political  platforms 
generally  are,  they  did  not  antagonize  local 
option  in  taxation.  The  Miami  County 
Republican  platform  declared  that: 

“We  favor  the  principle  of  home  rule 
or  local  option  in  taxation,  whereby  each 
city  and  county  may  raise  its  own  taxes,  in 
its  own  way,  for  its  own  purposes,  subject 
to  the  authority  of  the  General  Assembly 
to  limit  local  indebtedness  and  prevent 
any  abuse  of  power  by  the  local  governing 
bodies.” 

British  Municipalities  Petition  Parliament  for 
Local  Option 

The  movement  for  local  option  in  tax- 
ation goes  on  in  Great  Britain  with  con- 
stantly increasing  force,  and  unless  we  has- 
ten in  this  country  Great  Britain  is  likely 
to  be  ahead  of  us. 

The  councils  of  Glasgow,  Liverpool, 
London,  and  over  300  municipalities  have 
[ 40  ] 


petitioned  Parliament  for  local  option,  and 
a few  weeks  ago  the  Urban  District  Coun- 
cils Association  of  Great  Britain,  represent- 
ing 400  towns,  likewise  petitioned  Parlia- 
ment for  this  reform. 

Conclusion 

I do  not  propose  at  this  time  to  present 
an  argument  for  local  option  in  taxation. 
You  have  aleady  adopted  resolutions  which 
could  not  be  made  any  stronger,  and  the 
action  of  other  countries  and  many  of  our 
States  show  such  a strong  tendency  in  this 
direction  as  to  make  such  an  argument  al- 
most superfluous.  Our  nation,  made  up  as 
it  is  of  independent  States,  is  a magnificent 
example  of  the  blessings  of  local  self-govern- 
ment, and  the  movement  for  local  option 
in  taxation  is  merely  an  extension  of  the 
principle  which  has  made  this  country 
great. 

In  a democracy  where  the  enforcement 
of  law  is  in  the  hands  of  elected  officials, 
law  can  only  be  enforced  in  accordance  with 
the  prevailing  sentiment  of  each  commu- 
nity. Y ou  are  all  familiar  with  the  practi- 
cal nullification  of  restrictions  upon  personal 
[ 41  ] 


liberty  which  do  not  commend  themselves 
to  the  citizens  in  many  cities.  It  is  the 
rule,  and  not  the  exception,  that  taxation 
laws  are  enforced  in  the  same  spirit,  and 
the  practice  in  most  of  the  cities  of  the 
United  States  is  so  different  from  what  one 
would  expect  from  a reading  of  the  State 
statutes,  that  the  author  of  the  statutes  could 
not  recognize  his  own  law  in  practice.  This 
is  local  option  without  the  sanction  of  law. 
It  is  better  than  no  local  option  at  all,  but 
it  is  always  an  evil.  Laws  on  the  statute 
books  which  are  not  enforced  or  enforce- 
able breed  contempt  of  law.  This  leads  to 
unlawful  acts  subversive  of  individual  rights. 

Anyone  can  see  that  a tax  law  which 
may  work  fairly  well  in  thinly  settled  rural 
communities  will  be  productive  of  fearful 
injustice  in  a great  city.  The  attempt  to 
legislate  by  one  rule  for  great  cities  and 
country  villages  has  everywhere  proved  a 
failure.  It  is  time  that  we  learned  from 
bitter  experience  to  allow  such  latitude  to 
each  homogeneous  community  as  may  en- 
able it  to  adapt  its  tax  laws  to  the  condi- 
tions of  its  own  life. 


[42] 


AN  ACT 


To  Amend  the  Tax  Law  by  Providing  for  the 
Apportionment  of  State  Taxes  and  for  Local 
Option  in  Taxation 

The  People  of  the  State  of  New  Torky  repre-- 
sented  in  Senate  and  Assembly y do  enact  as 
follows: 

Section  i.  The  Tax  Law  is  hereby 
amended  by  adding  thereto,  after  Section  4, 
the  following  section: 

§ \a.  Other  property  may  be  exempted  from  taxation, 
or  the  assessment  upon  the  same  reduced,  as  provided  in 
this  section,  but  such  exemption  or  reduction  of  assess- 
ment shall  have  uniform  operation  throughout  the  county 
or  city  in  which  it  is  made,  and  shall  not  be  made  on  the 
ground  of  ownership.  Within  any  county  such  property 
shall  be  exempt  from  taxation,  or  the  assessment  upon 
the  same  reduced  in  such  manner,  as  the  Board  of  Super- 
visors of  such  county  shall  from  time  to  time  prescribe. 
Within  any  incorporated  city,  extending  over  the  whole 
of  any  one  county  or  over  more  than  one  county,  such 
property  shall  be  exempt  from  taxation,  or  the  assess- 
ment upon  the  same  reduced  in  such  manner,  as  the  Com- 
mon Council  or  Municipal  Assembly  of  such  city  shall 
from  time  to  time  prescribe.  Nothing  contained  in  any 
special  act,  or  the  act  incorporating  any  city  or  village,  shall 

[ 43  ] 


affect  the  validity  or  operation  of  any  such  exemption  or 
reduction  of  assessment.  The  provisions  of  this  section 
shall  not  affect  Section  four  nor  Articles  nine  and  ten  of 
this  chapter,  nor  any  other  general  law  of  the  State. 

[Note. — Section  four  of  this  chapter  provides  that  certain 
property  shall  be  exempt  from  taxation.  Articles  nine  and  ten 
deal  with  the  taxation,  for  State  purposes,  of  corporations  and 
transfers  of  property  by  will,  by  the  intestate  laws  of  the  State 
or  in  expectation  of  death.] 

Section  2.  Section  171  of  the  Tax  Law 
is  hereby  amended  by  adding  thereto  the 
following : 

Ninth.  Obtain  annually  from  the  financial  officer  or  other  of- 
ficer or  person  charged  with  the  custody  and  disbursement  of  any 
funds  of  each  tax  district  of  the  State  a report  of  the  amount  of 
gross  revenue  of  each  tax  district  for  the  preceding  calendar  year 
and  the  sources  of  such  revenue  ; and  for  this  purpose  such  local 
officer  of  each  tax  district,  at  the  expense  of  such  district,  shall 
furnish  such  information  in  such  form  as  may  be  required  by  the 
State  Board  of  Tax  Commissioners.  Neglect  or  refusal  to  file  a 
true  and  correct  report  in  the  office  of  the  State  Board  of  Tax 
Commissioners  at  the  time  and  in  the  form  required  by  the  Board 
is  a misdemeanor,  the  making  and  filing  of  a report  containing  a 
wilful  misstatement  is  a felony. 

T <;nth.  Classify  and  file,  according  to  tax  districts,  the  reports 
of  gross  revenue  which  they  obtain  from  local  officers. 

Eleventh.  Examine  the  reports  of  gross  revenue  filed  with 
them,  and  tabulate  the  results  of  such  examination,  so  as  to  show 
summarily,  and  in  separate  tables,  for  each  tax  district,  for  each 
county  and  for  all  the  counties  of  the  State,  and  for  each  calen- 
dar year,  (i)  the  gross  revenue,  (2)  the  sources  of  such  reve- 
nue, ( 3 ) any  other  results  which  they  think  it  for  the  public  in- 
terest to  exhibit.  They  shall  present  a report  of  the  results  of 

[ 44  ] 


such  examination  to  the  State  Board  of  Apportionment  at  its 
meeting  on  the  first  Tuesday  in  September, 

<^Tax  district,’’  as  used  in  this  section  and  in  Section  173 
of  this  chapter,  means  a political  subdivision  of  the  State,  having 
a board  of  assessors,  or  an  assessor  or  officer,  authorized  to  assess 
property  therein  for  taxation  for  State,  county,  city,  village, 
school,  highway,  or  any  other  purpose  whatever,  or  having  an 
officer  or  officers  authorized  to  sign  warrants  for  the  collection  of 
taxes. 

Gross  revenue,”  as  used  in  this  section  and  in  Section  173 
of  this  chapter,  means  the  total  sum  of  money  received  by  any 
tax  district  for  public  purposes,  and  the  value,  at  the  rate  of 
commutation  allowed  by  law,  of  work  performed  for  the  tax 
district  without  compensation  under  a requirement  of  law.  But 
it  does  not  include  assessments  for  local  improvements,  money 
borrowed,  money  received  as  interest  on  any  obligation  of  the 
tax  district  owned  by  said  district  or  held  in  trust  for  it  by  any 
board  or  officer,  or  so  much  of  the  revenue  from  sales  to  private 
users  of  water,  gas,  electricity,  or  other  industrial  service  as  rep- 
resents the  cost  thereof. 

For  the  purpose  of  this  section,  and  of  Section  173  of  this 
chapter,  the  city  of  New  York  shall  be  deemed  to  be  one 
county. 

Section  3.  Section  173  of  the  Tax 
Law  is  hereby  amended  so  as  to  read  as  fol- 
lows : 

§ 173.  State  Board  of  \Equali%ation\  Apportion- 
ment powers  and  duties. 

The  commissioners  of  the  Land  Office  and  the  three 
commissioners  of  taxes  shall  constitute  the  State  Board 
of  \Eqmli-z.aUon\  Apportionment.  The  State  Board 
of  \Equali%ation\  Apportionment  shall  meet  in  the 
city  of  Albany  on  the  first  Tuesday  in  September  in  each 
[ 45  ] 


year  \J'or  the  purpose  of  examining  and  revising  the  valua^ 
tions  of  real  and  personal  property  of  the  several  counties  as 
returned  to  the  Board  of  'Tax  Commissioners^  and  shall  fix 
the  aggregate  amount  of  assessment  for  each  county^  upon 
which  the  comptroller  shall  compute  the  State  tax.  Such 
board  may  increase  or  diminish  the  aggregate  valuations  of 
real  property  in  any  county  by  adding  or  deducting  such  sum 
as  in  its  opinion  may  he  just  and  necessary  to  produce  a just 
relation  between  the  valuations  of  real  property  in  the  State, 
But  it  shall^  in  no  instance,^  reduce  the  aggregate  valua- 
tions of  all  the  counties  below  the  aggregate  valuations 
thereof  as  so  returned~^  and,  at  such  meeting,  shall 
ascertain  and  determine  the  percentage  of  State 
tax  each  county  shall  pay,  by  dividing  the  sum 
of  the  gross  revenue,  for  the  preceding  calendar 
year,  of  each  county  including  all  the  tax  dis- 
tricts within  the  county,  by  the  sum  of  the  gross 
revenue  of  all  the  tax  districts  of  the  State  for 
the  same  year.  The  Comptroller  shall  immediately 
ascertain  from  this  \assessmeni\  determination  of  the 
percentage  of  State  tax  which  each  county  shall 
pay,  a copy  of  which  shall  be  transmitted  to  him,  the 
\firoportiori\  amount  of  State  tax  each  county  shall 
pay,  and  mail  a statement  of  the  amount  to  the  County 
Clerk  and  to  the  Chairman  and  Clerk  of  the  Board  of 
Supervisors  of  each  County. 

Section  4.  This  Act  shall  take  effect 
October  first,  1902. 

EXPLANATION,— Matter  underscored is  new; 

matter  in  brackets  []  is  old  law  to  be  omitted. 


[ 46  ] 


INDORSEMENTS 


^HE  foregoing  bill  has  been  specifically 

indorsed  by : 

The  Chamber  of  Commerce  of  the 
State  of  New  York. 

The  State  Commerce  Convention. 

Board  of  Trade  and  Transportation. 

Merchants^  Association. 

West  End  Association. 

United  Real  Estate  Owners'  Associa- 
tions. 

Business  Men's  Association  of  Cohoes, 
and  other  associations  of  Business  men. 

The  Central  Federated  Union. 

The  Building  Trades  Council,  and 
many  other  Labor  organizations. 


